Industry Insights

Refund Opportunities for Cook County Use Tax

February 2015
Author:  Joanna Simek

Joanna Simek

Director

Tax

233 S. Wacker Drive
Suite 8300
Chicago IL 60606-6339

Chicago - Willis Tower
312.288.4653

The Cook County use tax has been struck down by the Illinois Appellate Court. Taxpayers who paid the use tax on nontitled tangible personal property should file for refunds in accordance with the county’s outlined procedures.

Effective April 1, 2013, Cook County, Illinois, enacted a 1.25 percent use tax on the value of goods purchased outside the county for use in the county. The tax applied to most nontitled personal property. All companies doing business in Cook County were required to register to remit the tax to the county.

Almost immediately, constitutional and statutory objections were raised against imposing this tax, and a legal dispute followed. Taxpayers faced the decision to pay the tax or wait until the court cases were resolved. Opponents argued the Illinois statute prohibited home rule jurisdictions from imposing a use tax on the selling price of property. Although Cook County’s ordinance imposed the tax on the value of the goods and not the selling price, the Illinois Appellate Court held that “value” and “selling price” were ambiguous terms and, thus, interchangeable, meaning the tax is invalidated.

Cook County is required to begin processing claims for credit or refund under its Uniform Penalties, Interest and Procedures Ordinance, which doesn’t require the tax to have been paid under protest to be granted.

Cook County has specific forms and guidelines for acceptable credit or refund requests. Taxpayers have four years from the date the tax was paid to submit their claims. If you paid the tax and would like information about refund procedures, contact your BKD advisor.

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